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President Obama’s famous All of the Above energy policy released during his first term and perfected in his second term seems to have gained some attention and perhaps some followers around the world. The latest is Japan, which has decided to embrace more and different types of energy to replace the lost nuclear power capacity since the Fukushima incident.

Prior to the earthquake and tsunami of March 4th, 2011, Japan received 29% of its electricity from its nuclear reactor fleet. Subsequently, many of the country’s 54 nuclear power plants were shut down for inspection and stress testing, and some have been scheduled for complete decommissioning at a total cost of well over $100 billion dollars, but possibly approaching $1 trillion dollars over 50 years if the damaged reactors at the Fukushima-Daiichi nuclear power plant begin acting up and leaking even more than they have. Which could happen.

With almost 30% of their electricity production permanently unavailable or temporarily offline, the ever-industrious Japanese are looking to a better energy policy — one that will not leave them dependent on foreign politics, international trade disputes or shortages. Energy cost is a primary concern.

The good news is that Japan hopes to hit 20% of total electricity demand with renewable energy by 2030.

Japan’s energy choices include solar

Extensive research into solar utility-scale installations and rooftop solar for residential use in Japan have netted some amazing results. Japan ranks fourth among the nations with the most amount of solar capacity installed and continues a massive solar installation campaign. Some 10 Gigawatts of solar are being added to Japan’s grid this year.

Some farmers in Japan are finding that they can make more money with much less toil by turning their rice paddies into solar farms. In other cases, huge blocks of solar panels are mounted on floating pontoons in sheltered bays and lakes.

Japan shows a clear preference for solar power, even as it experiments with other renewable energy such as wind, tidal, hydrogen and methane hydrate ice.

Wind energy in Japan

Wind energy is making strides in Japan and the future of that is under discussion. However, Japan feels a need to protect its tourism industry and does not want monstrous turbines cluttering up shoreline tourist areas. Nevertheless, the country is forging ahead with plans for the largest offshore wind farm on the planet in non-tourist regions of the country.

Undersea Methane Hydrates

Japan has sent ships to the Arctic ocean in recent years to mine methane hydrate crystals that line the sea floor for hundreds of miles in all directions. It turns out that just off Japan’s coast there is a gold mine of methane “ice” also known as clathrate (more specifically, clathrate hydrate) just sitting there waiting to be picked up. In fact, some successful prototype operations have been reliably producing power in Japan, using only locally-mined clathrate.

It is a clean burning fuel, as methane clathrate hydrate composition is (CH4)4(H2O)23, or 1 mole of methane for every 5.75 moles of water, corresponding to 13.4% methane by weight. There is nothing else to it. No sulfur, no nitrogen, no trace contaminants. Pure fuel mixed with water ice.

“Japan hopes that the test extraction is just the first step in an effort aimed at bringing the fuel into commercial production within the next six years. That’s a far faster timetable than most researchers have foreseen, even though there is wide agreement that the methane hydrates buried beneath the seafloor on continental shelves and under the Arctic permafrost are likely the world’s largest store of carbon-based fuel. The figure often cited, 700,000 trillion cubic feet of methane trapped in hydrates, is a staggering sum that would exceed the energy content of all oil, coal, and other natural gas reserves known on Earth.” – National Geographic

Hydrogen fuel for electrical power production and for vehicles

As a clean burning fuel, hydrogen shows great promise. The only catch with this fuel are the costs associated with splitting ocean water into its constituent molecules, which, after you filter out the salt and any contaminants is; 1 hydrogen atom + 2 oxygen atoms = 1 molecule of water. Using electrolysis to convert vast quantities of water into hydrogen takes a huge amount of electricity, which is fine if it can be had cheaply enough. With the advent of solar power gird-parity, hydrogen production suddenly looks attractive at a large scale.

“Now that Toyota Motor says it will release mass-production fuel-cell vehicles powered by hydrogen, Japan has set an even bigger goal of making hydrogen a main energy source for the nation’s electric utilities. The nation’s first “hydrogen energy white paper,” released Monday, calls on the country to become a “hydrogen economy” by adopting the fuel for utility power generation. The paper was produced by the government-affiliated New Energy and Industrial Technology Development Organization.” – Wall Street Journal

We are at a unique period of human history where doors that were once solidly closed are now opening. Our energy future will be more diverse and cleaner for those nations and corporations that are open-minded enough to see the possibilities of clean and renewable energy.

Although there have been some failures in the business of renewable energy (as in any new field of endeavor) things renewable energy are starting to gain traction and acceptance not only by the public, but by policymakers around the world.

Japan, after initially reeling from the tsunami and Fukushima incident, has profoundly embraced solar and wind power and experimented with the promising tidal energy technology and has advanced clean burning energy solutions such as undersea methane hydrates and hydrogen fuel.

Certainly, fossil fuels have their place and they will be with us for some time to come. However, rather than tying ourselves to One Big Energy source (fossil fuels) an All of the Above approach may turn out to be the best, long-term solution after all.

Separate from discussions about airborne coal power plant emissions, are the high levels of water usage — proportional to the downstream water loss experienced by farmers, citizens, and other water users such as wildlife — caused by obscenely high coal power plant water requirements.

At a time of increasing water scarcity, water use by power plants varies widely. In some regions, that different water usage level is becoming an important part of the decision-making process for planners. climaterealityproject.org

In some regions of the world, there exists acute competition for water resources as coal power station operators vie for water with agricultural, urban, and other users of water, while areas with plentiful water find their power plant choices aren’t constrained by water supply issues at all.

The era of increasing water shortages and frequent drought seem here to stay, and the huge volumes of water required by some power plants is becoming a factor in the decision-making process as to which type of power plant is most suited for any given location.

Therefore, the conversation is now arcing towards the local availability of water and thence, to the most appropriate type of power station to propose for each location.

So let’s take a look at the water usage of five common types of power plants:

Coal: 1100 gallons per MWh

Nuclear: 800 gallons per MWh

Natural gas: 300 gallons per MWh

Solar: 0 gallons per MWh

Wind: 0 gallons per MWh.

While 1100 gallons per MWh doesn’t sound like much, America’s 680 coal-fired power plants use plenty of water especially when tallied on an annual basis.

The largest American coal-fired power station is in the state of Texas and it produces 1.6 GW of electricity, yet it is located in one of the driest regions on the North American continent. Go figure.

At one time as much as 55% of America’s electricity was produced via coal-fired generation and almost every home had a coal chute where the deliveryman dropped bags of coal directly into the homeowner’s basement every week or two.

But in the world of 2014, the United States sources 39% of its electricity from coal power plants and this percentage continues to decline even as domestic electricity demand is rising.

Texas Utility Going Coal-Free, Stepping Up Solar

In a recent column by Rosana Francescato, she writes;

“El Paso Electric Company doubles its utility-scale solar portfolio with large projects in Texas and New Mexico. As if that weren’t enough, the utility also plans to be coal-free by 2016.” — Rosana Franceescato

She goes on to tell us that EPE serves 400,000 customers in Texas and New Mexico and gives credit to the foresighted management team. El Paso Electric is already on-track to meet the proposed EPA carbon standard. Their nearby 50 MW Macho Springs solar power plant about to come online is on record as having the cheapest (PPA) electricity rate in the United States.

This solar power plant will displace 40,000 metric tonnes of CO2 while it powers 18,000 homes and save 340,000 metric tonnes of water annually, compared with a coal power plant of the same capacity. That’s quite a water savings in a region that has been drought-stricken in 13 of the last 20 years, only receiving 1 inch of rainfall per year.

In February 2014, EPE signed an agreement for the purchase all of the electricity produced by a nearby 10 MW solar installation that will 3800 homes when construction is completed by the end of 2014. And they are selling their 7% interest in a nearby coal power plant. Now there’s a responsible utility company that makes it look easy!

Solar’s H2O advantage

The manufacture of solar panels uses very little water, although maintenance of solar panels in the field may require small amounts of water that is often recycled for reuse after filtering out the dust and grit, while other types of energy may require huge volumes of water every day of the year.

Wind’s H2O advantage

Wind turbines and their towers also use very little water in their construction and installation, although some amount of water is required for mixing with the concrete base that the tower is mounted on at installation.

In the U.S. which is facing increasing water shortages and evermore drought conditions as global warming truly begins to take hold in North America, switching to a renewable energy grid would have profound ramifications. Estimates of water savings of up to 1 trillion gallons could be possible if utilities switched to 100% renewable wind and solar power with battery backup on tap for night-time loads and during low wind conditions.

Midway through that transition, the present water crisis in the U.S. would effectively be over. Yep, just like that. Over.

China’s Looming Water Crisis

China’s looming water crisis has planners moving to taper their coal and nuclear power generation construction programmes. You can’t operate these plants without the required water, even for a day. Yet, the people who live and grow crops and raise livestock in the surrounding areas need access to undiminished water supplies. What good is a coal power plant if everyone moves away due to a lack of water?

There are very legitimate reasons nowadays to switch to solar and wind generation — and the reduction of airborne emissions used to be the prime consideration and may remain so for some time, however, massive reductions in water consumption might now prove to be the dealmaker in some regions — and the emission reductions may now be viewed as the happy side benefit! Wow, that’s a switch!

Of course, the benefits of solar and wind power will still include no ongoing fuel costs, very low maintenance and the lowest Merit Order ranking (the wholesale kWh price of electricity) of any energy.

Granted, there are locations where renewable energy doesn’t make sense, such as some Arctic or Antarctic regions. In these places solar simply isn’t worthwhile and wind levels may not be sufficient to make the economic case. Biomass may be a partial solution in these areas and there may be the opportunity for geothermal energy — although finding ‘hot rocks’ underground near population centres is much more unlikely than many people may realize.

But in the future, the vast majority of locations will be powered by renewable energy paired with a battery backup or a conventional grid connection — or both. And its a future that’s getting closer every day.

Accenture says a sustainable energy policy could save European electricity consumers €27 to €81 billion per year by 2030.

A recent report authoured by Accenture for EURELECTRIC says that if European nations work together towards an integrated and pan-European energy policy it could generate savings for electricity consumers between €27 to €81 billion per year by 2030 and the result would be a cleaner utility grid model.

Accenture is calling on European governments to phase-out renewable energy targets and renewable energy programme spending — replacing both with a carbon trading scheme, one that essentially rewards low carbon energy producers and penalizes high carbon energy producers.

All of this is happening during a time of unprecedented change within the European energy industry.

In the fascinating German example, that country shut down much of its nuclear power generation rather than spend multi-billions to upgrade its aging and oft-troubled nuclear fleet. Consequently, Germany is now burning record amounts of coal and natural gas to replace that lost generation capacity — in addition to the installation of record amounts of wind, solar and biomass capacities to the German grid.

In the decades following WWII, German utility companies operated in a cozy, sheltered environment. But few knew how expensive it was to operate and maintain on account of massive government subsidies and preferential treatment of the utility industry. German consumers never had it so good and likewise for sleepy German energy giants, which have now awoken to find that the energy picture has changed dramatically in little over a decade.

Hence, even more subsidies were employed to counter for the loss of German nuclear power via Feed-in-Tariffs (FiT) for wind, solar and biomass capacity additions to the grid, partially financed by a hefty nuclear decommissioning fee added to every German electricity bill.

At least in Germany, it turns out that while nuclear has practically disappeared, and with no fuel costs to worry about, renewable energy combined to lower German electricity rates during the hours of the day that wind and solar are active, causing downward pressure on electricity rates. At the same time, German utilities burned record amounts of brown coal and expensive Russian natural gas to meet total demand which caused upward spikes in the electricity rate during the hours of the day that coal and natural gas were required to meet total demand.

In simple terms, the removal of nuclear from the German energy mix has resulted in higher electricity rates — not because some of that capacity was replaced by renewable energy — but because significant fossil fuel burning was required to meet demand, combined with nuclear decommissioning costs.

Were German politicians and their voters wrong to shut down the country’s nuclear power plants? Not a bit. Germany’s nuclear power plants were problem-plagued and the costs to bring all 19 reactors up to modern standards were prohibitive. Shutting down the German nuclear fleet was unfortunate perhaps, but necessary.

German consumers continue to yearn for clean energy and low energy costs. Unsurprisingly, the German public has reacted to energy that seems to be getting dirtier and more expensive by the day, and the massive nuclear decommissioning costs which will continue long past 2022, perhaps until 2045.

After the loss of nuclear, the German energy grid initially became cleaner with the addition of wind and solar, but then became dirtier than ever as record amounts of brown coal and natural gas were burned! Es ist zum weinen.

And that’s just the story in Germany. Every European partner country has its own story to tell in an electricity market that is undergoing unprecedented and rapid change — and each country’s electricity market is as different from each other as they are from the German example. Although each story is different, the net result is the same; The energy industry across Europe must adapt to the loss of (some) nuclear and the growing consumer disenchantment with fossil fuels, and to the huge consumer driven additions of renewable energy to the grid. And it must be done in a cost-effective way or utility companies and their respective governments will face consumer backlash.

Utility companies shocked by the unprecedented and rapid changes thrust upon them by nuclear shutdowns and the multiple demands of consumers are hoping that a harmonized set of rules across Europe will allow them to meet rising electricity demand.

If you look at what utilities really want, it is one harmonized set of rules across Europe. Europe is one market; it’s one playing field, and utilities really benefit from a harmonized set of rules.

“European electricity prices are rising fast. As a result, the overall increase in energy expenditure is putting mounting pressure on residential end-users and undermining the competitiveness of European industry. The implementation of the energy transition has so far lacked optimization on a pan-European scale. Without a concerted effort to more effectively manage the costs of the energy transition, expenditure on electricity and gas in 2030 could be 50 percent higher than it is today.

A step-change in the reshaping of the European energy system is needed — by reconfirming the European power sector’s support for Europe’s sustainability agenda through an optimized approach that avoids unnecessary costs. Doing so would put significant benefits within reach: our analysis shows that implementing an integrated set of levers could generate net savings of €27 to €81 billion per year by 2030. Such savings could be achieved by further integrating energy markets and the supporting regulatory framework at a European level and by leveraging flexibility throughout the electricity value chain — provided utilities, governments, regulators and consumers can forge a joint commitment to work together.” — Quoted from the Accenture/EURELECTRIC report

Accenture’s report says that Europe’s utilities must meet customer demands for more energy, but make it cheaper and cleaner and that the existing grid model will fail unless changes are made. Accenture has suggested four main ways to achieve these goals.

Optimizing renewable energy systems

Market integration

Active system management

Demand response and energy saving

“The restructuring of the European electricity system will have to be carried out cost-effectively if we are to gain the support and trust of energy consumers. This study shows that, with the right policies in place, the energy transition could cost each European citizen over € 100 less a year than if we continue with business as usual.” Hans ten BERGE Secretary General. Union of the Electricity Industry – EURELECTRIC

It seems reasonable that all of Europe’s utility companies acting together could arrive at a better solution. Complementary and overlapping energy capabilities may prove to be the model that works for Europe, as opposed to the direct competition model favoured in the U.S.

A carbon tax which reflects the true societal costs of fossil fuels could be a just solution to Europe’s present grid malaise. However, it is doubtful that a carbon tax will ever reflect the true cost to society of fossil fuels — which have been estimated to cost €30 per tonne of CO2 — but a carbon mechanism may well provide the impetus to foster a new and better European energy paradigm.

No matter the how the equation looks, it is sometimes only the answer that matters. A cleaner energy mix and reasonable electricity rates within a stable electricity grid is something that all sides can cheer for. How very European!

This EnerVault flow battery stores solar power from the solar panels and releases it as needed. | Photo courtesy: EnerVault.

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Yesterday, an almond grove in California’s Central Valley hosted the opening of the world’s largest iron-chromium redox flow battery. Originally pioneered by NASA, these flow batteries are emerging as a promising way to store many hours of energy that can be discharged into the power grid when needed.

Traditionally, electric generation follows the demands of the daily load cycle. But as more sources of renewable generation such as solar and wind are integrated into the power grid, balancing demand and generation becomes more complicated. With energy storage, we can create a buffer that allows us to even out rapid fluctuations and provide electricity when needed without having to generate it at that moment.

Unlike other types of batteries, which are packaged in small modules, iron-chromium flow batteries consist of two large tanks that store liquids (called electrolytes) containing the metals. During discharge, the electrolytes are pumped through an electrochemical reaction cell and power becomes available. To store energy, the process is reversed. With Recovery Act funding from the Department’s Office of Electricity Delivery and Energy Reliability, California energy storage company EnerVault has optimized the system to create a more efficient battery.

This pilot project in Turlock, California, can provide 250kW over a four-hour period, helping to ensure the almond trees stay irrigated and the farm is able to save money on its electrical bills.

This is how the system works:

The almond trees are most thirsty between noon and 6 p.m. The farm uses nearly 225 kW of electricity to power the pumps that get the water to the trees. Onsite solar photovoltaic panels can supply 186kW at peak power, not quite enough energy for watering the trees throughout the day. The balance could be taken from the grid, but grid electricity is most expensive from noon to 6 p.m.

This is where storage enters.

At night electricity is inexpensive, so the batteries begin to charge up. In the morning the solar panels help top them up the rest of the way. Then, during expensive peak periods, the needs of the trees are satisfied by solar and flow batteries — renewable energy optimized through storage.

While the Turlock facility is a unique application, flow batteries are not just for thirsty almond trees. For example, they could be an especially good solution for small island grids such as Hawaii, where severe wind ramps or rapid changes in photovoltaic generation can destabilize the local grid, or at military bases that need to maintain mission-critical functions.

Similarly, flow batteries paired with renewables can be used in a resilient microgrid that can continue to operate when disasters strike and power outages ensue.

In the face of changing climate conditions, energy storage and grid resiliency have become more critical than ever. Flow battery technology is expected to play a vital role in supporting the grid both in California and across the U.S.

Additional Information:

Dr. Imre Gyuk is the Energy Storage Program Manager, Office of Electricity Delivery and Energy Reliability.

HOW DOES IT WORK?

Iron-chromium flow batteries store liquids, called electrolytes, that are pumped through an electrochemical reaction cell to release power. The process is reversed in order to store energy. This means that the batteries can store energy from the grid, and release it when the load is heaviest.

Most utility companies have Merit Order ranking control rooms similar to this one where decisions are made about which power producer will contribute to the grid in real time. Microprocessors make the instant decisions, while humans are present to oversee operations and plan ahead.

On the Variability of Renewable Energy; The ongoing argument about renewable energy additions to national electrical grids.

Solar Variability

Some people argue that solar photovoltaic (solar panels) produce ‘variable’ electricity flows — and they assume that makes solar unsuitable for use in our modern electric grid system.

And it’s true, the Sun doesn’t shine at night. Also, if you are discussing only one solar panel installation in one farmer’s field, then yes, there is the variability of intermittent cloud cover which may temporarily lower the output of that particular solar installation.

But when grid-connected solar arrays are installed over vast areas in a large state like Texas, or throughout the Northeastern U.S.A. for example, it all balances out and no one goes without power as solar panels produce prodigious amounts of electricity during the high-demand daytime hours. If it’s cloudy in one location thereby lowering solar panel outputs, then it is sunny in 100 other solar locations within that large state or region of the country.

So, solar ‘variability’ disappears with many widely scattered installations and interconnection with the grid. So much for that accusation.

NOTE: The marginal ranking for solar is (0) and that ranking never varies. (More on this later)

Wind Variability

The situation with wind power is essentially the same, One major difference though; In many parts of the world the wind tends to blow at its most constant rate at night, which helps to add power to the grid while the Sun is asleep.

In fact, complementary installations of solar and wind help to balance each other through the day/night cycle — and through the changing seasons. There is even an optimum solar panel capacity to wind turbine capacity installation ratio, but I won’t bore you with it.

NOTE: The marginal ranking for wind is (0) and that ranking never varies.

Natural Gas Variability

What? Natural gas is not variable!

Oh really? Over the course of the past 60 years, how has the natural gas price per gigajoule changed? Got you there! The natural gas price has increased by orders of magnitude and wild price fluctuations are quite common.

OK, that’s not ‘output variability’ but it is a variable factor with regard to energy pricing. And that’s a variable that actually matters to consumers.

Natural gas prices have swung wildly over the years forcing utilities to peg their rates to the highest expected natural gas rate. No wonder investors love natural gas!

So there is ‘supply variability’ and ‘rate variability’ with natural gas, which is why it is often the last choice for utility companies trying to meet daily demand. Gas is a good but expensive option and it comes with its own variability baggage.

We won’t even talk about the associated CO2 cost to the environment. (OK, it’s about $40 per tonne of CO2 emitted)

Coal variability

Not to the same degree as natural gas, but coal also faces price swings and potential supply disruptions — again forcing utility companies to set their rates against unforeseeable labour strikes at a mine, a railway, or shipping line — and against coal mine accidents that can shut down a mine for weeks, or against market-generated price spikes.

These things are impossible to foresee, so this ‘averaging up’ of the price results in higher energy bills for consumers and better returns for investors.

Yes, there is variability in coal supply, coal supply lines, coal power plant maintenance cycles which can have a plant offline for weeks, and market pricing. These things can affect total annual output, yet another kind of ‘variability’. (Again, that doesn’t factor-in the other costs to society such as increased healthcare costs from burning coal which releases tonnes of airborne heavy metals, soot, and nasty pollutants besides CO2 — which some estimates put at $40-60 per tonne emitted — in addition to the environmental cost of $40 per tonne of CO2 emitted)

NOTE: Should we talk here about how much water coal plants use every year? More than all the other energy producers put together, and then some!

Hydro power variability

What? Hydro power is not variable!

Oh yes it is. Nowadays, many hydro dams in the U.S. can barely keep water in the reservoir from August through November. They cannot produce their full rated power in a drought, they cannot produce their full rated power in late summer, they often cannot produce power during maintenance, or during earthquake swarms. Just sayin’ hi California!

An impressive body of water behind the dam is meaningless when the water level isn’t high enough to ‘spill over the dam’. If the water level isn’t high enough to spin the turbines then all that water is just for show. Take a picture!

“In 1984, the Hoover Dam on the Colorado River generated enough power on its own to provide electricity for 700,000 homes because the water level of Lake Mead behind the dam was at its highest point on record. But since 1999, water levels have dropped significantly, and Hoover Dam produces electricity for only about 350,000 homes.” — CleanTechnica

And then there is this problem; Global warming and its resultant drought conditions mean that some dams are essentially ‘finished’ as power producing dams for the foreseeable future.

Again, we have output variability; But this time it is; 1) lower power output due to reduced reservoir levels caused by anthropogenic drought and 2) the time of yearthat hydro dams cannot produce their full rated power.

Price variability: This is what Merit Order ranking is about

Merit Order ranking is a system used by most electric utilities to allow different types of electrical power plants to add power to the electric grid in real time. Thanks to a computerized grid, this occurs on a minute-by-minute basis every day of the year.

In the German example, electricity rates drop by up to 40% during the hours in which solar or wind are active, and this is what Merit Order ranking is all about; Using the cheapest available electricity source FIRST — and then filling the gaps with more expensive electrical power generation.

Solar and wind electricity are rated at (0) on the Merit Order scale making them the default choice for utility companies when the Sun is shining, or the wind is blowing, or both.

Why? No fuel cost. That’s the difference. And bonus, no environmental or healthcare costs with solar and wind either.

Once all of the available solar and wind Merit Order ranking (0) capacity is brought online by the utility company, then (1) nuclear, (2) coal, and (3) natural gas (in that order) are brought online, as required to match demand, according to the marginal cost of each type of energy. (German Merit Order rankings)

NOTE: In the U.S. the normal Merit Order rankings are; (0) solar and wind, (1) coal, (2) nuclear, and (3) natural gas, although this can change in some parts of the United States. Merit Order is based on cost per kWh and different regions of the country have different fuel costs.

(The one cost that is never factored-in to the kWh price is the cost of disposal for nuclear ‘spent fuel’ and for good reason, but that’s a discussion for a different day)

The Fraunhofer Institute found – as far back as 2007 – that as a result of the Merit Order ranking system – solar power had reduced the price of electricity on the EPEX exchange by 10 percent on the average, with reductions peaking at up to 40 percent in the early afternoon when the most solar power is generated.

Here’s how the Merit Order works.

All available sources of electrical generation are ranked by their marginal costs, from cheapest to most expensive, with the cheapest having the most merit.

The marginal cost is the cost of producing one additional unit of electricity. Electricity sources with a higher fuel cost have a higher marginal cost. If one unit of fuel costs $X, 2 units will cost $X times 2. This ranking is called the order of merit of each source, or the Merit Order.

Using Merit Order to decide means the source with the lowest marginal cost must be used first when there is a need to add more power to the grid – like during sunny afternoon peak hours.

Using the lowest marginal costs first was designed so that cheaper fuels were used first to save consumers money. In the German market, this was nuclear, then coal, then natural gas.

But 2 hours of sunshine cost no more than 1 of sunshine: therefore it has a lower marginal cost than coal – or any source with any fuel cost whatsoever.

So, under the Merit Order ranking of relative marginal costs, devised before there was this much fuel-free energy available on the grid, solar always has the lowest marginal cost during these peaks because two units of solar is no more expensive than one. – Susan Kraemer

It’s as simple as this; With no fuel cost, solar and wind cost less. Although solar and wind are expensive to construct initially (but not as expensive as large hydro-electric dams or large nuclear power plants!) there are no ongoing fuel costs, nor fuel transportation costs, nor fuel supply disruptions, nor lack of rainfalls, to factor into the final retail electricity price.

As solar panel and wind turbine prices continue to drop thereby encouraging more solar and wind installations, we will hear more about Merit Order ranking and less about variability. And that’s as it should be, as all types of grid energy face at least one variability or another.

Only solar, wind, hydro-electric, and nuclear have a predictable kWh price every day of the year. Coal, natural gas, and bunker fuel, do not. And that’s everything in the energy business.

Although utility companies were slower than consumers to embrace renewable energy, many are now seeing potential benefits for their business and henceforth things will begin to change. So we can say goodbye to the chatter about the Variability of Renewable Energy and utility companies can say goodbye fuel-related price spikes.

Buckle up, because big changes are coming to the existing utility model that will benefit consumers and the environment alike.